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"Remarkable" Apple closes smartphone gap on Samsung

"Remarkable" Apple closes smartphone gap on Samsung

Holiday seasonality, strong end-user demand, and a deep selection of models propelled smartphone volumes to a new record level for the quarter and for the year.

First, at a time when average selling prices (ASPs) for smartphone are rapidly declining, Reith says Apple managed to increase its reported ASPs in the fourth quarter due to higher-cost new models.

Second, the growth of iPhone sales in both the U.S., which is considered a saturated market, and China, which presents the dual challenges of strong local competitors and serious price sensitivity, were "remarkable", according to Reith.

"Sustaining this growth and higher ASPs a year from now could prove challenging, but right now there is no question that Apple is leading the way," he adds.

In 2013 IDC talked about the smartphone industry topping the 1 billion unit milestone, and while year-over-year growth did slow from 40.5% in 2013 to 27.6% in 2014, the market clearly still has legs.

This past year volumes surpassed 1.3 billion units and the vendor scenario has witnessed continued shakeups.

As a result, growth is forecast to decline to the mid-teens in 2015, but opportunity exists as much of the world's population is either not a wireless subscriber or has yet to move to a smartphone.

"That the worldwide smartphone market grew by 27.6% in 2014 is noteworthy, but it also represents a significant slowdown compared to 2013," adds Ramon Llamas, Research Manager with IDC's Mobile Phone team.

"Mature markets have become increasingly dependent on replacement purchases rather than first-time buyers, which has contributed to slower growth."

In emerging markets, Llamas believes first-time buyers continue to provide a lot of market momentum, but the focus has shifted toward low-cost devices, creating a different dynamic for both global and local vendors.

"What remains to be seen is how the vendors beyond Samsung and Apple will assert themselves," Llamas adds.

"With Lenovo acquiring Motorola, and Xiaomi having greater aspirations beyond China, the competitive pressure will come more from below and less from above.

"This will make the smartphone race continuously competitive as 2015 shapes up."


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